Agricultural mechanization in Ethiopia: enabling policy, suppliers and inter-regional heterogeneity

Abstract Background: Agriculture in Ethiopia heavily relies on traditional farm power sources and is characterized by the lowest access to farm machinery in contrast to other places in SSA. The study analyzed the factors and gaps in the delivery of mechanization inputs through the qualitative survey of the supply chain actors. Furthermore, the study involved the crossectional survey of the producer households in the major crop production areas of Oromia, SNNPR, Amhara, and Tigray regions. Results: The recent policy amendment resulted in a reduction in the price of farm machinery while it excludes spare parts in isolation and raw materials for manufacturing. The counter influence of the simultaneous depreciation of the exchange rate has undermined the likely impacts of the tax benefits. The major deterring issues in the machinery supply system include the high shortage of foreign currency, the upsurging price of spare parts, and shortage of trained machinery operators. A formal survey tells that a significant proportion of the areas have no access to mechanization while in some parts of the country, utilization of the combine harvester reached full coverage and a large proportion of the farmers use tractor power.Conclusions: Maintaining a healthy business competition among imports and the manufacturing sector remained an important policy gap. The mechanization hiring costs, service transactions, and coordination have shown significant variability across the crop potential production areas. Resolving of the supply side encounters, development of the hiring service market, and reduction of transaction cost are the key areas of interventions in the mechanization supply and demand systems.